Scottish Legal Complaints Commission proposes charging owners of law firms bigger share of complaints costs

SLCC chief executive Neil Stevenson - Image credit: Scottish Legal Complaints Commission

The owners of law firms could face a bigger share of complaints costs under new proposals from the Scottish Legal Complaints Commission (SLCC), which handles complaints against lawyers in Scotland.

All practising solicitors and advocates have to pay an annual fee to the SLCC to cover the cost of investigating complaints against the profession.

As part of its annual consultation for the year ahead, the SLCC is proposing to freeze fees for the majority of individual lawyers, but raise them for owners of legal businesses.

This change could see partners and managers in private practices pay a levy of £494 in 2019-20, a rise of 28 per cent, while lawyers employed by those companies would pay £386, the same as this year.

There would continue to be discounted rates for in-house lawyers, commercial attorneys and advocates, areas of law where there are far fewer complaints.

Explaining the proposed change, the SLCC said: “Owners and partners accept the risk of business and receive the profits from legal work, but they also have the most control over approaches which could reduce the common causes of complaints in the sector.”

A change to the way lawyers are charged for complaints was one recommendation in ‘Fit for the Future’, a review of the regulation of the legal services sector, published in October 2018.

The review recommended a move to ‘entity regulation’, where legal firms could be held accountable to a regulator.

That would require reform of the current system of regulation, but the SLCC said it wanted to consult on “what first steps may be possible within the current system”.

The alternative, continuing with the current system, would be a nine per cent increase in fees across the board next year to meet the cost of a rising number of complaints to the SLCC.

Over the last three years there has been a 22 per cent rise in complaints received by the SLCC.

In the first six months of its current business year, from July to December 2018, the number of complaints was 20 per cent higher than the same period the year before.

While the SLCC said that part of this increase was due to 84 linked cases against two providers, even without those cases the number of complaints would be six per cent above the same period in 2017.

SLCC chief executive Neil Stevenson said: “Not only is the number of complaints increasing, but individual complaints are becoming longer and more complex to work on. 

“We know that our staff work hard and combined with changes to our process, we have been working through more complaints. 

“However, we cannot stand still and must meet the continuously rising demand. 

“We are keen to explore all options to improve our processes where we can, but will also continue to make the case for new primary legislation to create a better statutory system, and call on the Scottish Government to move rapidly to consult on the recommendations of the recent independent review of legal regulation.”

SLCC chair Jim Martin added: “The funding model is fundamentally flawed.

“This is a multi-million pound industry yet the complaints model is funded, in the main, by levies on individual solicitors, often subsidising their private sector employers.

“Regulatory reform needs to move to a focus on regulating the business units that provide services to the public and not just individual staff within them.

“Ultimately business owners set the risk and quality culture in a business, and are accountable for services delivered to the public. 

“Business owners need to meet the cost of complaints about their businesses.  

“In the context of rising complaints, and an ongoing pattern of common issues in certain areas, we are interested in views on whether this is a fairer approach and encourage all sectors of the profession, and the public, to engage in this debate.”

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However, the Law Society of Scotland warned than any increase would mena higher costs for consumers.

Law Society of Scotland president Alison Attack said: "It is the most vulnerable people in society who rely most on legal services, often at times of difficulty and distress.

"This latest fee increase will mean consumers in Scotland will bear even higher costs, with the Scottish Legal Complaints Commission costing almost 40 per cent more than it did four years ago. 

"Many firms could end up paying four times as much as originally proposed when the SLCC was conceived.

"There are a number of reforms which could be made to the legal complaints system to make it quicker and more efficient. 

"We have been working with the SLCC on these measures and hope the Scottish Government can prioritise time to progress the changes during this year. 

"Whilst these improvements aim to create a better complaints process, they have potential to save money too, which would be much better news for consumers of legal services.

"We will look at this draft budget carefully and will consult with solicitors across Scotland before submitting our formal response to the consultation."